Holmes jury says it's deadlocked on 3 of 11 criminal charges

Holmes jury says it's deadlocked on 3 of 11 criminal charges

Elizabeth Holmes fraud trial jury says it is deadlocked on three of 11 criminal charges: Judge tells them to continue deliberating for a seventh day

  • Former Theranos CEO Elizabeth Holmes faces 11 criminal charges alleging that she duped investors and patients by hailing her company’s blood-testing technology as a medical breakthrough when in fact it was prone to wild errors
  • Judge Edward Davila gave jurors an ‘Allen charge’, urging them to deliberate further after they sent a note saying they were unable to reach a verdict on three of the 11 charges 
  • The eight men and four women who will determine Holmes’ fate spent much of their holiday season behind closed doors in a San Jose, California, courthouse 
  • Before those problems were exposed in 2015 and 2016, Holmes briefly realized her aspirations for fame and fortune 
  • She raised more than $900 million from a list of renowned investors that included media mogul Rupert Murdoch, software mogul Larry Ellison and the Walton family behind Walmart
  • At Theranos’ height, Holmes had amassed a fortune of $4.5 billion on paper and was being lionized as a visionary on cover stories in business magazines

After seven days deliberating on fraud charges against former Theranos CEO Elizabeth Holmes, a jury said announced on Monday it is unable to reach a unanimous verdict on three of the 11 criminal counts she faces.

Holmes, 37, is facing nine counts of wire fraud and 12 counts of conspiracy to commit wire fraud, with federal prosecutors alleging she deceived investors in her blood-testing device so she could rake in billions of dollars.

If convicted on all counts, Holmes could face up to 20 years in prison, as well as a fine of $250,000 plus restitution for each of the nine counts of wire fraud two counts of conspiracy. 

But on Monday, jurors in the issued a statement to US District Judge Edward Davila saying they could not reach a verdict on three of her 11 counts, though they did not specify which counts they were unable to reach a verdict for.

Following the announcement, Judge Davila publicly raised the possibility of a partial verdict if the jurors remain conflicted on returning verdicts for any of the charges.

He then ordered them to deliberate further under an ‘Allen charge,’ and instructed the eight men and four women who comprise the jury to do their best to reach a verdict, reminding them that Holmes is presumed innocent ‘unless or until the government proves her guilt beyond a reasonable doubt.’   

If the jury is still unable to reach a verdict, Davila said, a mistrial could be declared on those three counts and Holmes could be retried. 

Elizabeth Holmes, center, walks to federal court in San Jose, California, on Monday, January 3 as the jury resumed deliberations for the seventh day after an extended holiday break

Holmes, center, is charged with nine counts of wire fraud and 12 counts of conspiracy to commit wire fraud

If convicted on all counts, Holmes could face up to 20 years in prison, as well as a fine of $250,000 plus restitution for each of the nine counts of wire fraud two counts of conspiracy

The jury must sift through three months of testimony and more than 900 pieces of evidence as they decide whether she intentionally deceived investors, business partners, patients and advertisers in the quest for investments for her blood testing startup.

Holmes founded Theranos in 2003, and dropped out of Stanford the next year as she raised money for her new blood testing device.

She repeatedly claimed that the company’s new testing device could scan for hundreds of diseases and other problems with a few drops of blood taken with a finger prick instead of a needle stuck in a vein.

The results, she claimed, could come within a matter of minutes.

The concept was so compelling that Theranos and Holmes were able to raise more than $900 million, some of that from billionaire investors such as media magnate Rupert Murdoch and software titan Larry Ellison.   

The Palo Alto, California, company also negotiated potentially lucrative deals with major retailers Walgreens and Safeway. Holmes soon began to grace national magazine covers as a wunderkind.

At Theranos’ height, Holmes had amassed a fortune of $4.5 billion on paper and was being lionized as a visionary on cover stories in business magazines. 

But unbeknownst to most people outside Theranos, the company’s blood-testing technology was flawed, often producing inaccurate results that could have endangered the lives of patients who took the tests.

After the flaws were exposed by the Wall Street Journal in 2015 and 2016, Theranos eventually collapsed. The Justice Department filed its criminal case in 2018.

Over the course of the trial, prosecutors have called 29 witnesses including former Theranos employees, retail executives and even a former US Defense Secretary as they attempted to prove that Holmes ‘chose fraud over business failure,’ as Jeff Schenk, an assistant US attorney said in his closing arguments, according to the New York Times.

The defense, meanwhile, rested much of their case on Holmes’ own testimony.

She said she believed the claims she made about Theranos’ miniLab and did not find out until it was too late that it did not work as promised.

Holmes’s lawyer Kevin Downey told the jury last month that Holmes didn’t realize the scope of the problems with the miniLab until a Theranos laboratory director informed her in March 2016 that the company had to invalidate 60,000 of its past blood tests.

He likened Holmes’ final days at the company to a captain valiantly trying to save a sinking ship, and said that if she had committed any crimes, she would have been scurrying to jump overboard like a scared rat, Downey, told jurors as he wrapped up roughly five hours of closing arguments. 

But not only did she never sell a share, Downey said, she continued to try to salvage the company. Her turnaround efforts included ousting Theranos’ chief operating officer, Sunny Balwani, who also had been her lover.

Holmes, left, has testified that she was in a decade-long abusive relationship with Theranos’ chief operating officer, Sunny Balwani, right. They are pictured here addressing the company’s staff in 2015 at the company’s former headquarters in Palo Alto, California

Taking the stand in November, Holmes acknowledged some of the government’s points about the failures of the miniLab and the company’s lofty goals, she maintained she never intended to deceive anyone.

She alleged that she was the victim of a decade-long abusive relationship with Balwani,  who, she testified, had been secretly controlling her diet, her friendships and more while claiming it would help her succeed in the business world.

Balwani, who is also facing fraud charges and will stand trial next month, has denied the allegations.

Near the end of her testimony, CNN reports, she also testified that while she was not aware about everything that happened at Theranos, she ‘never’ took any steps to mislead anyone who invested in the company.

‘They were people who were long-term investors and I wanted to talk about what this company could do a year from now, five years from now, 10 years from now,’ she claimed.  

‘They weren’t interested in today or tomorrow or next month,’ she said. ‘They were interested in what kind of change we could make.’ 

The fact that the jury has still not been able to come to a unanimous decision, Los Angeles-based criminal defense attorney Lara Yeretsian – who has represented celebrities like Michael Jackson and Scott Peterson – said it may mean that Holmes’ testimony resonated with at least some of the jurors.

‘The bottom line is that she wouldn’t have messed with sophisticated investors and powerful people if she didn’t truly believe that she could deliver,’ Yeretsian said in a statement to DailyMail.com. 

‘By sending the jurors back to deliberate again, the judge may be putting pressure on the minority to reconsider their position.’ 

Holmes, seen here entering court on Monday, has also claimed she never meant to mislead any of the investors in her company

At Theranos’ height, Holmes had amassed a fortune of $4.5 billion on paper and was being lionized as a visionary on cover stories in business magazines.

The eight men and four women who will determine Holmes’ fate have already since spent much of their holiday season behind closed doors in a San Jose, California, courthouse.

When they were still unable to reach a verdict by the middle of last week, the jurors were given Thursday off before an already scheduled court holiday on Friday. 

They hadn’t provided any inkling where they stood in their deliberations last week after sending two notes to the federal judge presiding over the case the previous week.

No reason was given for pausing the deliberations earlier than expected last week.

The jury so far has spent a total of roughly 40 hours across six days discussing the charges against Holmes. 

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